Genesis of the Financial Services Law in Mauritius
Our financial services law is progressively changing the investment environment in Mauritius. It is apposite to see from where it starts.
As such, our Financial Services Law (FSL) is not codified in Mauritius as compared to our Civil Code, Code de Commerce or our Criminal Code. The sources of the FSL are found scattered in a confusing state in various legislations made under Acts of Parliament, by way of Delegated Legislations and by Case Law where for example in a recent judgment delivered by Her Ladyship Mrs A.F.Chui Yew Cheong in the case of “M&A Aluminium Centre Ltd v/s The Mauritius Commercial Bank Ltd” 2009 SCJ 52 , the Supreme Court, when referring to Section 40 (1) under the Banking Act 1988 headed ‘’Identity of customers’’ , held that in looking at the identity of a customer a bank has the added duty to look at the credibility as well of that customer. The word ‘’Credibility” does not exist in the Act of Parliament but the Supreme Court has created it.
The main regulatory bodies in that sphere are the Bank of Mauritius (BOM) which first came into operation under Ordinance 1 on the 17th April 1958 and the Financial Services Commission (FSC) being the successor of the defunct Mauritius Offshore Business Activities Authority which became operational in 1992.In addition to the sources mentioned above, the BOM and the FSC do make rules and regulations to expand the financial and the legal services into a more stringent environment to meet the needs of the Local and International users. It is to be noted that every financial institution dealing in both banking and non banking sectors need to apply to the BOM and to the FSC for their respective license and unfortunately we do not have what is obtained in UK where, ever since June 1998 the Financial Services Authority had become the one stop shop for both sectors. Our situation in Mauritius is of complex nature and fortunately the Expert in FSL knows where to turn for it.
Be it as it may, what follows brings the reader to a wonderful ‘’voyage dans le temps’’ starting back from 1936 with a halt in 1996 thereby showing how our FSL has inched its way from the British Colonialism to an Independent Mauritius. Those enactments which form the genesis of our FSL have today made this Country an International Financial Center. They are as follows:
1) Ordinance 1 of 1936 The Mauritius Agricultural Bank for the purposes of granting long-term loans for agricultural needs
2) Ordinance 57 of 1950 Savings Bank Ordinance
3) Ordinance 24 of 1951 Exchange Control Ordinance an ordinance conferring powers and imposing duties and restrictions in relation to gold, currency, payments, securities, debts , and the import, export, transfer and settlement of property etc
4) Ordinance 5 of 1953 Crown proceedings Ordinance in respect of infringement of Patent, or any officer or agent of the Crown infringes a registered trade mark, or infringes any copyright… where it is committed with the authority of the crown, civil proceedings shall lie against the crown
5) Ordinance 1 of 1958 The Banking Ordinance to regulate the business of banking. The licensing authority was the Financial Authority with the then existing Banks namely Barclays Bank D.C.O., Mauritius Commercial Bank Limited, Mercantile Bank limited
6) Ordinance 30 of 1959 The Moneylenders Ordinance making provisions in relation to money lending and for purposes connected therewith. This Ordinance was designed to the Cooperative Society, Banks, Insurance Companies, Pawnbrokers and those having a Moneylender’s license
7) Ordinance 43 of 1959 The Insurance Ordinance making provision for the carrying on of insurance business in the Colony. The Registrar of Insurance was created.
8) Ordinance 20 of 1963 The Investment in Mauritius Government Securities Ordinance designed to apply to all securities created or issued on behalf of the Government of Mauritius
9) Ordinance 34 of 1963 The Development Bank of Mauritius Ordinance with the aim of facilitating the industrial, agricultural and economic development of the Colony.
10) Ordinance 43 of 1966 The Bank of Mauritius Ordinance with the aim of creating a Bank to be the banker of the Government
11) Act 40 of 1968 The International Financial Organizations Act to enable effect to be given to the International Agreements establishing the International Monetary Fund, the International Bank for Reconstruction and Development, the International Finance Corporation and the International Development Association
12) Act 50 of 1968 The Treasury Bills Act to allow the Government to borrow money by issuing Treasury Bills. Powers were given to the Bank of Mauritius to act as depository
13) Act 31 of 1971 repealing Ordinance 1 of 1958 Banking Act where the licensing authority is vested with the Central Bank and the latter having control over all Banks
14) Act 10 of 1972 repealing Ordinance 34 of 1963 Development Bank of Mauritius
15)Act 11 of 1972 Development Bank of Mauritius (International Credit) making provision for the raising of credit from the International Development Association by the Government of Mauritius for the development of productive facilities and resources in Mauritius through the DBM
16) Act 3 of 1974 Loans Act
17) Act 6 of 1975 Double Taxation relief ( Taxes on income) (France) Cancellation Act
18) Act 47 of 1975 Savings Bank Act repealing Ordinance 57 of 1950
19) Act 34 of 1976 The State Bank is authorized to issue premiums bonds on behalf of the Government of Mauritius
20) Act 7 of 1981 Bonds Act for the issue of bearer bonds and premium bonds
21) Act 11 of 1987 the creation of the Stock Exchange of Mauritius and a Chamber of stockbrokers
22) Act 38 of 1988 making new provisions for the Stock Exchange repealing Act 11 of 1987
23) Act 41 of 1988 Banking Act repealing the Act of 1971
24) Act 25 of 1989 Trusts Act
25) Act 18 of 1992 Mauritius Offshore Business Activities Act providing for the establishment of the Mauritius Offshore Business Activities Authority to regulate offshore business activities from within Mauritius and for the issue of offshore certificates and to provide for other ancillary or incidental matters
26) Act 10 of 1992 to make provisions for offshore trusts in Mauritius
27) Act 4 of 1994 International Companies Act
28) Act 12 of 1995 Foreign Exchange Dealers Act providing for the regulation of the activities of persons, other that offshore banks, that are authorised to deal in foreign exchange and for matters connected therewith or incidental thereto
29) Act 30 of 1996 Securities (Central Depository, Clearing and Settlement) Act providing for the establishment and regulation of a central depository, clearing and settlement service in order to facilitate dealing in securities.
ABOUT THE AUTHOR: Siv Potayya is a former assistant manager at the legal department of the Mauritius Commercial Bank and former partner at Juristconsult.
Siv is a law practitioner and advises on lots of cross-border transactions. He has founded Wortels Lexus in June 2010.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.